Climate Change Bill: An opportunity missed?

The government has rightly identified the need for binding emissions reductions targets after the initial Kyoto Protocol commitment runs out in 2012.

Stabilising global average temperatures requires action until at least the middle of this century, and investment in the necessary technology requires an extended payback period. The Climate Change Bill is the government's proposal for a structured approach to reduce CO2 emissions progressively over successive five-year periods.

This will continue until 2050, when they should be 60% lower than in 1990. If enacted, it will place the Secretary of State under a legal duty to ensure that the 2050 target is met.

When introducing the bill, much was made of this duty. It was said these are "legally binding policy commitments". And it was said a government that failed to stay within the targets would variously "be open to judicial review", and "could be required to take remedial action by order of court".

These claims are overstated. And businesses considering investment on the strength of the new order heralded by the bill would do well to remember that the real pressure on the government to keep to the target will be political.

The bill proposes:

A system of carbon accounting

Five-yearly carbon budgets

A Committee on Climate Change

Annual reporting by the government and the Committee on Climate Change

Emissions control requires effective measurement of emissions. The bill provides that UK CO2 emissions (excluding shipping and aviation) will be measured each year to produce a net emissions figure, in accordance with international carbon reporting practice.

The carbon budget is simply a limit on the net amount of (anthropogenic) CO2 emitted in a five-year period. The first five-year period is the period from 2008 to 2012. This is merely the first Kyoto commitment period. The bill provides for further five-year periods running to the 2050 target.

There is at the moment no corresponding commitment by the other Kyoto signatories to reduce emissions in this period. But, at a summit in March 2007, EU leaders adopted a commission proposal to take collective action to reduce collective emissions by 30% by 2020 with further reductions by 2050 if others follow suit. With this bill the UK is attempting to lead by example.

Budget limits on emissions reductions have to be set so that the 2050 target will be met. Before the end of 2008, the government must put forward carbon budgets for the three five-year periods running up to the end of 2022.

These budgets must require that emissions are at least 26% (and up to 32%) below 1990 levels in 2022. From 2022, a budget must be set for each five-year period at least 12 years ahead.

The UK and the EU cannot unilaterally effect global emissions reductions that will make a worthwhile difference to anthropogenic climate change. Others, notably the US and China, must engage. Unilateral action if other key players do not participate will be futile and economically damaging.

The 2050 target can be modified in the event that others will not make the sacrifices needed globally. And it can even be modified if the current consensus on anthropogenic climate change does not hold - if the scientists change their mind about why the planet is warming.

The power to vary the target is limited to cases of significant developments in scientific knowledge about climate change or in international law or policy. Ultimately, the act could be repealed if it serves no purpose.

The committee
The Secretary of State appoints the Committee on Climate Change. When carbon budgets are set, it is to give advice on a limited range of matters. These are: the level of the budget; the right mix of actual reductions and emissions credits to achieve the budget; and how much of the reductions should come from sectors covered by trading schemes.

Every year starting in 2009, this committee will report to Parliament on progress made towards meeting carbon budgets and the 2050 target. The government must respond to these reports.

For each year from 2008, the government will produce a statement of annual emissions and a statement of the progress towards meeting the carbon budget. Each year from 2009, the Committee on Climate Change will publish its assessment of the progress towards meeting carbon budgets that have already been set and the 2050 target. The government is obliged to publish a response to this report.

Most believe some climate change is inevitable. The bill requires the Secretary of
State to lay before parliament periodic reports containing an assessment of the risks of the current and predicted impacts of climate change for the UK, together with the government's proposals and policies for adapting to climate change.

Is this all enforceable?
The Secretary of State has to set carbon budgets and cannot ignore the advice of the Committee on Climate Change in determining the amount, the use of credits and the contributions to be made by sectors covered by trading schemes.

After setting the budget, the Secretary of State must present to Parliament the government's proposals and policies for meeting the budget. It is not the function of the Committee on Climate change to prescribe or even advise on the proposals and policies.

The government is free to choose how it will go about achieving the budget. The government claims the courts will be able to step in to take remedial measures in the event of an actual or anticipated failure to meet a carbon budget. So, it is important to bear in mind that the carbon budget is fundamentally different from the budget presented by the Chancellor of the Exchequer.

The emissions that count are not emissions from government activity and therefore directly under the control of the government. They are emissions from all relevant activities in the UK. The chancellor's budget relates to government spending of which the government is more or less in direct control. The government is not, however, spending (or producing) the bulk of the CO2 to which the carbon budget applies.

The emissions targets can only be met if the government can successfully reduce spending (CO2 production) by others. This means introducing legislation that successfully ensures that the nation as a whole does not produce more CO2 than the budget requires.

Legal enforcement of this duty could in principle involve sanctions for exceeding a budget. The bill does not propose sanctions, so that can be ruled out. Another approach to enforcement is to require the government to bring forward legislation if it looks like targets will not be met. It is fanciful to suggest that this can be done through the courts.

The government can introduce a variety of measures to reduce CO2 emissions. Increasing nuclear power generation, promoting renewables, reducing consumption through changing patterns of road transport, creating energy efficient buildings are all methods of reducing fossil fuel consumption.

The decision as to which combination of these means should be used is political and technical. If the government failed to meet a budget or seemed likely to miss the 2050 target, it is unimaginable that any court would purport to make these decisions on behalf of the nation.

The bill empowers the government to purchase emissions credits to meet carbon budgets. It could have gone further and obliged the government to do so in order to make up any shortfalls.

It could even have required the government to buy and hold such credits as might be advised by the Committee on Climate Change during the currency of a carbon budget. Or it could have been required to make such provisions in its accounts as the committee might advise for purchasing such credits at the end of a budget period.

Financial consequences based ultimately on an obligation to purchase credits for emissions reductions made elsewhere in the world would provide at the same time a sanction that would operate on the government's mind and compensation for the national failure to reduce CO2 emissions into the atmosphere.

There are no such provisions and accountability for failure to keep within budget will be purely political. Depending on your point of view, that may be a good thing or an opportunity missed.